Protecting Your Interests: What to Ask for in a Real Estate Contract

27 February 2026

Buying or selling a home is a huge financial decision. It's exciting, nerve-wracking, and downright overwhelming at times. One of the most crucial elements of any real estate transaction is the contract. This little stack of papers might not look like much, but it holds the power to protect your interests—or leave you vulnerable to costly mistakes.

Truth is, the devil is in the details. If you're not paying attention to what's in (or missing from) your real estate contract, you could be walking into a financial minefield. So, what should you be looking for? What should you ask for in a real estate contract to safeguard your investment?

Let’s break it down in simple terms.

Understanding the Real Estate Contract: Why It Matters

A real estate contract is a legally binding agreement between the buyer and the seller that outlines the terms of the sale. It covers everything from purchase price and financing to contingencies and closing dates.

A poorly drafted contract can lead to delays, financial losses, or even lawsuits. On the flip side, a solid contract protects both parties, ensuring a smooth transfer of property with minimal hiccups.

So, how do you make sure the contract is working in your favor? Here’s what you need to ask for.

1. Clear and Specific Property Description

You’d be surprised how many people overlook this! The contract should clearly define:

✅ The exact address of the property
✅ Legal description (lot number, parcel ID, etc.)
✅ Any included structures (garage, shed, guest house)
✅ Appliances or fixtures that come with the property

Imagine buying a home only to find out later that the seller took the fancy chandelier that you assumed was included. Avoid misunderstandings by spelling out every detail.

2. Purchase Price and Payment Terms

Money talks, and in a real estate contract, every dollar needs to be accounted for. Make sure the contract specifies:

✅ The purchase price
✅ Earnest money deposit (how much and when it’s due)
✅ How the remainder will be paid (cash, mortgage, financing terms)
✅ Any seller concessions (like closing costs the seller may cover)

This section ensures everyone is on the same page financially, preventing last-minute surprises.

3. Contingencies: Your Get-Out-of-Jail-Free Card

Contingencies are conditions that must be met for the sale to go through. If they aren't, you can back out without losing your deposit. Every smart buyer should ask for key contingencies, such as:

a) Financing Contingency

This protects buyers who are relying on a mortgage. If you can't secure financing, you can walk away without penalties.

b) Home Inspection Contingency

A home may look perfect at first glance, but hidden problems (like foundation cracks or plumbing issues) can turn it into a money pit. This contingency lets you negotiate repairs or back out if major issues arise.

c) Appraisal Contingency

If you're getting a mortgage, lenders will require an appraisal. If the home is valued lower than the agreed price, you can renegotiate or exit the deal.

d) Sale of Existing Home Contingency

Need to sell your current home before buying a new one? This contingency ensures you’re not stuck paying two mortgages.

Without these contingencies, you could lose thousands if something goes wrong.

4. Earnest Money Deposit Protection

Earnest money is a good-faith deposit that shows the seller you're serious. But what happens to that money if the deal falls apart?

The contract should clearly state:

✅ Under what conditions you get your deposit back
✅ What happens if you back out for an invalid reason
✅ Where the money is held (escrow company, attorney, etc.)

This prevents disputes over refunds and ensures you don’t lose your deposit unfairly.

5. Closing Costs: Who Pays What?

Closing costs can add up FAST. These include lender fees, title insurance, appraisal fees, and property taxes. The contract should outline:

✅ Who covers each expense (buyer, seller, or shared)
✅ Estimated closing costs for both parties
✅ Any negotiated seller concessions

Knowing what you’re responsible for prevents sticker shock on closing day.

6. Closing Date and Possession Terms

Timing matters. A contract should include:

✅ The official closing date
✅ When the buyer gets possession (right after closing or later?)
✅ Any rental agreements if the seller stays temporarily

Without clear terms, you could end up with an awkward situation where you own the home but can’t move in.

7. Title and Ownership Clauses

A seller must prove they have the legal right to sell the property. Make sure the contract includes:

✅ Title search requirement (ensures no hidden claims on the property)
✅ Title insurance (protects against disputes over ownership)

This safeguards you from future legal battles over property ownership.

8. Repairs and Home Condition Agreements

If you’re buying a used home, odds are it won’t be perfect. The contract should specify:

✅ Which repairs (if any) the seller is responsible for
✅ What happens if new issues arise before closing
✅ Whether the home is sold "as-is"

Having this in writing prevents arguments and costly repair disputes.

9. HOA Rules and Fees (If Applicable)

If the home is part of a homeowner’s association (HOA), the contract should include:

✅ A copy of the HOA rules
✅ Monthly fees and what they cover
✅ Potential future assessments

Nobody wants to move in and suddenly get hit with hidden fees or annoying restrictions they weren’t aware of.

10. Default and Dispute Resolution Terms

What happens if one party fails to meet contract terms? The agreement should outline:

✅ What counts as a breach of contract
✅ Penalties for breaching the contract
✅ Whether disputes will be resolved through mediation, arbitration, or court

A solid dispute resolution clause can save you from expensive legal battles down the road.

11. Special Requests and Addendums

Every contract can include custom terms that benefit both parties. Possible add-ons include:

✅ Seller agreeing to pay for home warranty
✅ Lease-back agreements (if seller wants extra time before moving)
✅ Personal property included in the sale (like furniture or appliances)

Adding these extras ensures there are no misunderstandings.

Final Thoughts: Never Sign Blindly

A real estate contract can either be your best friend or your worst enemy. It's packed with legal jargon and fine print that can make or break your deal.

Before signing anything:

📌 Consult a real estate agent and attorney
📌 Read every line, even the small print
📌 Negotiate terms that protect YOU

Real estate transactions are high-stakes. A well-written contract ensures your interests are safeguarded, giving you confidence in your purchase.

At the end of the day, would you rather spend a few extra hours reviewing the contract—or deal with the regret of missing a critical detail? The choice is yours.